How to Start a Business in Bangladesh: A Complete Guide

Congratulations on starting your journey to become an entrepreneur in Bangladesh! The World Bank classifies Bangladesh as a lower middle-income country. Goldman Sachs recognizes it as one of the “Next Eleven” emerging markets.

With poverty decreasing by about 2% every year, there are great opportunities for new businesses. Are you curious about how to start a business in Bangladesh? This article from Law Advisor BD will give you all the information you need to start your business in Bangladesh.

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Different Types of Business Structure in Bangladesh

how to start a business in bangladesh

Before starting your venture, you must choose from these business structures:

  1. Sole Proprietorship

A sole proprietorship is a business owned and operated by a single individual. The owner is personally responsible for all debts and obligations of the business.

  1. Partnership

A partnership is a business structure where two or more individuals share ownership and management responsibilities.

  1. Private Limited Company

A private limited company is a separate legal entity owned by a small group of shareholders. The owners have limited liability.

  1. Public Limited Company

A public limited company is a business that offers its shares to the general public through a stock exchange.

7 Steps to Starting a Business in Bangladesh

how to start a business in bangladesh

Here are the essential steps to start a business in Bangladesh:

Step 1: Form a Business Plan

Identify a viable business venture in Bangladesh through careful planning. Explore high-demand sectors such as IT services, e-commerce, agriculture, and logistics.

Step 2: Secure Funds

Securing capital is essential for your business. Explore funding options such as bank loans, microfinance programs, and equity funding from investors. Maintain a financial cushion to cover unexpected expenses and ensure continuity.

Step 3: Register the Business

Name Clearance: Name clearance is the process of obtaining approval for a proposed business name from the relevant government authority.

Obtain name clearance through the RJSC website. Then, submit the necessary application and documents for company registration. After paying the required fees, you will receive a Certificate of Incorporation.

Prepare essential documents like the:

  • Memorandum of Association
  • Articles of Association
  • Form IX.

Ensure all director information, including National ID and TIN, is accurate. Consulting with a legal professional lawyer like Law Advisor BD can help navigate the registration process effectively.

Step 4: Open a Corporate Bank Account

Afterward, open a corporate bank account. To set up a corporate bank account, you will need to provide specific documents, such as:

  • Certificate of Incorporation
  • Memorandum and Articles of Association
  • A copy of your trade license
  • National ID or Passport of Directors
  • Tax Identification Number
  • A document authorizing the opening of the bank account and designating signatories.
  • Utility bills or lease agreements that confirm your business address.

Step 5: Obtain Specific Business License

Trade License: A trade license is a legal document issued by a local government authority that permits an individual or business to conduct specific types of business activities within a designated area.

You may need various licenses and permits based on your business type. For instance:

  • Food License is required for businesses involved in food production, processing, or sales.
  • Import/Export License is necessary for businesses engaged in international trade

Business owners need to obtain a Trade License from the local City Corporation or Union Parishad. Additionally, if the annual turnover of the business exceeds BDT 3 million, VAT registration becomes mandatory.

Step 6: Select the Business Location

Choosing the right Strategic Locations is crucial for business success. Consider factors such as –

  • Proximity to target markets and suppliers
  • Access to transportation networks
  • Availability of utilities

Step 7: Hire Employees

Ensure your hiring practices comply with local labor laws. This includes:

  • Minimum wage standards
  • Maximum working hours
  • Contract terms.

Use various recruitment channels to find suitable candidates. These channels include job portals, social media, and networking events. Implementing training and development programs is essential for employee growth and retention.

Offer orientation programs and provide regular skill-enhancement training to support your employees’ continuous improvement.

5 Profitable Business Ideas in Bangladesh

how to start a business in bangladesh

Here is an analysis of some of the most profitable business ideas in Bangladesh:

1. Online Clothing Stores

You can start an online clothing store in Bangladesh as there is a high demand for affordable, customized clothes. You can reach customers through platforms like Facebook, Instagram, and Tiktok. This option is more affordable than opening a physical store.

How to Start:

  • Focus on a niche, such as sustainable fashion or traditional wear.
  • Buy materials locally to save money.
  • Promote your products on Instagram and Facebook using ads.

2. Freelance IT Services

There is a global market with a high demand for services like web design and digital marketing. You can work from anywhere as long as you have internet access. This business model can provide a good income since you can earn in foreign currencies from international clients.

How to Start:

  • Learn skills like coding or graphic design.
  • Sign up on freelancing platforms such as Upwork or Fiverr.
  • Build a strong portfolio to attract clients

3. Grocery Delivery Services

Many residents in Dhaka value the convenience of home-delivered groceries due to challenges such as:

  • Huge traffic
  • Unavailability of buses or rickshaws

You can consider starting a small grocery delivery business in areas like Gulshan, Mirpur, or Dhanmondi.

How to Start:

  • Partner with local stores or purchase fresh items from markets.
  • Use apps or WhatsApp to take orders and manage deliveries.

4. Organic Farming

There is a growing demand for organic food among health-conscious consumers in Bangladesh. Therefore, you can open an organic farming business where you provide organic vegetables and fruits at affordable prices.

How to Start:

  • Acquire or rent land for farming.
  • Grow in-demand crops like tomatoes or leafy greens.
  • Use natural farming methods such as composting.

5. Mobile Car Wash Services

Many car owners appreciate the service of having their vehicles cleaned without needing to visit a physical location. You can start a mobile car wash service that travels to customers’ homes or workplaces.

How to Start:

  • Invest in portable cleaning equipment and eco-friendly cleaning supplies.
  • Create a website or use social media to promote your services.

Approximate Cost of Starting a Business in Bangladesh

how to start a business in bangladesh

 

Procedure

Fee/Cost (BDT)

Name Clearance Certificate

500.00

Company Registration with RJSC

For Memorandum of Association: 500.00-1,000.00

For Articles of Association: 3,000.00-20,000.00 (depends on the authorized capital)

Registration Fee: 1,200.00

Company Seal

100.00 – 200.00

Bank Account Opening

No fee

Trade License

1,000-20,000 (depends on the type of business)

Tax Identification Number (TIN)

No fee

VAT Registration

No fee

Note: Actual costs can vary significantly based on factors like authorized capital, legal fees, and specific business requirements.

FAQs

E-commerce, particularly online retail, food delivery, and digital services, is expected to be highly profitable. It’s due to increasing internet penetration and smartphone usage.

You should learn about the Bangladesh Labor Act. This law tells you about employee rights, working conditions, and wage regulations. Make sure to provide proper contracts to your employees and follow the minimum wage laws.

You can conduct market research by using surveys and focus groups. Analyzing existing market reports is also helpful. It is important to engage with local communities and talk to potential customers.

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